San Francisco’s Board of Supervisors has approved the proposed ordinance which would limit the number of days any unit that hasn’t already been registered with the City can be rented on a short-term basis (a.k.a. Airbnb’ed) to no more than 60 days per year, regardless of whether a rental was “hosted” (i.e., the host is present at the time of the rental) or not.

The approved ordinance also redefines the definition of an “Interested Party” that’s allowed to bring a private right of action to shutter and seek monetary damages for the operation of an un-registered short-term rental to nonprofit organizations and those who reside in the building in which the rental is taking place, eliminating the current allowance for neighbors outside the building but within 100 feet and shortening the waiting period after which the aforementioned private right of actions could be filed from 135 to 30 days following a formal complaint to the City on which it has yet to act.

But having been passed by a 6-2 vote with two Supervisors absent (Wiener and Yee) and Supervisor Farrell recused for a conflict of interest, the possibility of a successful Mayoral veto looms.

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Comments from “Plugged-In” Readers

  1. Posted by Iolderpete

    Shouldn’t “interested parties” be “non-profits” that DON’T RECEIVE CITY FUNDING? In either event, it seems like they want to let loose the dogs of ideology.

    I have news for the Progressive 6 – those units aren’t coming back as $500/ rentals any time soon.

    • Posted by cfb

      I’m pretty sure no one expects them to come back as $500 rentals. They do expect them to come back as housing for actual residents though.

      • Posted by Hitman

        Good luck with that. There is an unofficial Landlord’s Strike in SF. If they want us to rent out our properties on a long-term basis they can change the rent control rules. Until then, we do not play their game.

        • Posted by Roy

          And you’re proud that a gang of greedy jerks is engaging in racketeering? I hope you’re not delusional enough to think your cute little attempt at extortion will actually work.

          • Posted by Fishchum

            How is it “extortion”? There’s no law that forces a landlord to rent out a vacant unit. A landlord can leave a unit empty for any reason they like.

        • Posted by dubocer

          DON’T TRUST THE SUPERVISORS.
          With the BoS sticking it to owners ever few months (for years) it’s no wonder there are tens/thousand of vacant units, no owner should trust them.
          This is probably the main reason folks didn’t apply for a permit, next thing you know they’ll be spying on you in your own home.
          No mention of all the tenants who are doing this Illegally either.
          Time to grow up SF, vote these idiots out and end rent control. Anyone can see Airbnb only started because of SF’s outrageous rules.
          They had the chance to get rid of RC and they failed. Units are not coming back as regular rentals and anyone who lived in a place for 10yrs is not going to get ‘selected’ for a lease. Only new folks will get that chance if at all.

          • Posted by Jake

            Don’t trust misleading claims that there are tens of thousands of “vacant” units in SF, especially if tied to a rent-control rant. FWIW, I posted this on SS earlier this year:

            The US Census estimates around 30-32k “vacant” housing units in SF. They break it down into categories. Here are the numbers from the 2010-2014 ACS average:

            31,686 Total:
            6,837 For rent
            1,814 Rented, not occupied
            1,171 For sale only
            1,424 Sold, not occupied
            7,474 For seasonal, recreational, or occasional use
            12,966 Other vacant

            BTW, if you own and reside in more than one home (Mitt Romney, John McCain,…), then the Census will count one as occupied and all the rest as vacant in either the “occasional use” or “Other vacant” category.

            Also, this is a vacancy rate of ~8%, which is slightly lower than the rate for California. CA and SF have nearly the same percentages of “For rent”, “Rented, not occupied”, and ” Sold, not occupied”. These just look like normal churn numbers.

            ———————

            Many companies are already spying on you in your home. Check your browser. Probably has hundreds of trackers installed by corporations you’ve never heard of or never asked you directly for permission. And your phone company has a log of your phone call history. And shipping and delivery companies know about all those shipments from the naughty store. And all your shopper loyalty card purchases and online purchases and credit card purchases are in databases. And Netflix/Hulu/Comcast/etc knows what you are watching. And the NSA ….And the Russians and the Chinese and quite a few teenagers can crack your pc/mac/router/smarthome too, whenever they wish. Most of you are not as alone as you seem.

          • Posted by SFrentier

            The number of vacant by choice units is debatable, but what isn’t debatable is that there are at least 10,000+, and that is due to the hostile rental environment that is created by local politicians. Many property owners have no/low mortgages and don’t need the cash from every building. I have heard of SO MANY cases of this, a reasonable extrapolation will lead to 10,000+ vacant units easily.

          • Posted by Jake

            reasonable people don’t extrapolate from anecdotal evidence, as to do so is inherently irrational, but I get your point. There are many (many) bunches, whose magnitude is based on hunches, but whose motivation is galtian. Kinda the property owner version of the homeless…..Some opt out of the system to shelter in place and some to shelter in no place. I would think that lax tax (prop 13) and inspection regimes contribute somewhat too. But hey you can’t run a pseudo-socialist economy without driving a few capitalists to ruinous despair and the vacancy equivalent of vagrancy.

        • Posted by Ron

          The next US President may be sympathetic to arguments against Rent Control.

          • Posted by Jake

            Maybe, but his sympathies are unlikely to matter much because the Supreme Court has repeatedly upheld rent control, going back to 1921. Though if he were to express those sympathies with his usual disregard for civilities it likely will strengthen the backers of rent control in states where he is very unpopular like CA and NY.

          • Posted by Ron

            We also know he will be making at least one Court appointment.

          • Posted by Jake

            Yup, and as recently as 2012 the Supremes (with Mssr Scalia) were offered the review of NYC rent control. Same as it ever was.

        • Posted by Adam

          How about this- We’ll give you a choice between rent control or frozen property taxes, but excuse me if I object to no rent control and frozen property taxes. The reason you don’t have to rent out your property, the reason you have the luxury of leaving your property vacant is because you pay almost nothing in property tax. I shed no tears for you.

  2. Posted by MarinaBoy

    90 days is a better compromise!

  3. Posted by equal4all

    60 days is a good compromise. It should apply to “registered” units as well.

    • Posted by Mr Pants

      Yep. Expect that people currently registered to be ‘grandfathered’ in and allowed 60+, but any new people will be limited 60 day days. Good old Gov. Lee is going to veto this as soon as it hits his desk.

      • Posted by Chedi 415

        I would expect to be grandfathered given I jumped through all the ridiculous hoops the city put in place: got the biz license, applied and received Short Term Rental License. 60 days is ridiculous… I’ll compromise at 90, but it’s time for the city to get out of my bedroom (although Alvalos can stay, he’s hot)

        • Posted by SocketSite

          As we reported above, the new limits only apply to units which haven’t already been registered.

        • Posted by Mr Pants

          What good is it to create these tiers of people based on when they registered? For the people that aren’t registered, fine them and call it a done deal. Force them to go though the same hoops you went through, and bring them in line with the rest of the people that are ‘legal’.

          Cap wise.. I think it’s fair to say two tax rates.
          60 days or less is low tax. I honestly don’t know what this rate is, but it’s probably not as high as hotel rates.
          61 and up gets taxes similar to hotel rates.

  4. Posted by Gorkem

    So supply/demand doesn’t matter when it comes to building 1000s of more units but it matters when couple hundred units are rented out for Airbnb?

    • Posted by Thatguynotthatotherguy

      I was going to say exactly this. Thank you.

    • Posted by SFRealist

      Ding ding ding!

    • Posted by Hunter

      Obviously both matter, but I’d like to clarify that the number of hosts in San Francisco is somewhere between 7-8K, not “a couple hundred.”

      • Posted by Ohlone Californio

        Why would you post something and then misrepresent it? of the 8665 hosts, 3256 are private rooms, and 450 are shared rooms. So that leaves 4959 units of the rental market.

        I’ll leave it at that. I haven’t even gotten into how many of those are pied a terres for people who largely live elsewhere, or how many are single family homes that would never otherwise come to the rental market.

        • Posted by Jake

          3256 private rooms that could be in the rental market. Private rooms get rented out, sometimes even non-bedrooms are rented out to an individual when a group house/flat tries to max $$$. By all accounts/counts thousands not a couple hundred. I’ll leave it at that.

          • Posted by Ohlone Californio

            So all 3256 private rooms could be in the rental market, could they? You don’t know that. Anyway, my response was not to you, but you felt like you had to ape my language to be extra snide. Noted.

          • Posted by Ohlone Californio

            Anyway as you say most private rooms are the domain of landlords, but rather master tenants. So what does that have to do with the price of fish?

          • Posted by Jake

            These 3256 private rooms are on the rental market. We all “know” that or at least have good reason to believe it from the link posted above. We don’t know how many are also available for rent longerishterm via non-Aridnd channels.

            BTW, why would you post something and then misrepresent it? I wrote nothing about what percentage of these thousands of currently-for-rent private rooms are “the domain of landlords” vs “master tenants”. I doubt that you know that either. Seems you like to call out other people for “misrepresent”ing while you merrily make up stuff to reinforce a weak point. Noted.

            If you have just noticed my inglorious affliction for reflection, well, thanks for all the (3256) fish.

          • Posted by Ohlone Californio

            Uh huh. Big up yourself while employing the same style snark every clod on the internet is employing these days, from genius to imbecile, why don’t ya? not feeling it.

            Anyway, feel free to take away that all 3256 private rooms, a k a roommate situations, would otherwise be on the rental market. I really don’t care. It’s a chore to talk to you.

          • Posted by Jake

            Hey, we all make mistakes. Longer they harden the more of a chore to unwind, as you have now done after several days of dryhole fishing.
            In this exchange, I just been following your leading-tone. “why would you … misrepresent…i’ll leave it at that…ape…snide…noted…snark…clod…imbecile.” You’re the one on this thread with the less-than-pleasant diction. Rudeness shouldn’t compensate for errors of fact or judgement, except in rigged presidential elections. Corrections on this or any of my other posts from you or anyone else are greatly appreciated.

          • Posted by Ohlone Californio

            say wha? you’re calling “a market” AirBnB’s private rooms for rent as capable of being in the rental market. That simply isn’t a case you can possibly make. Everything else is noise.

          • Posted by Ohlone Californio

            Also, as to your following my tone lead, no. You jumped into a comment thread where a comment was not directed toward yourself, and you repeated my language with snide intent. I said ape. Ape it was. Feel free to scroll up.

          • Posted by Jake

            Now you are just getting silly. Do you think you have exclusive rights to post on this thread? As to who “jumped into a comment thread where a comment was not directed toward yourself”, well, had Hunter addressed you? Feel free to scroll up, maybe a wee bit higher this time. Why would you post something and then misrepresent it? Honest question, no snide intended.

            As to whether it is reasonable to consider properties that are publicly listed as for rent as being in the rental market, well, I can lead you to the truth, even explicate it, but I can’t make you comprehend it.

          • Posted by Ohlone Californio

            Yes, private room rentals on AirBnB is a market. Heh. Agreed.

          • Posted by Jake

            Even Aridnd doesn’t call themselves a “market” because they aren’t and they know better. They somewhat awkwardly style themselves a “community marketplace”. Though some in SF view Aridnd more as a “community disorganizer”.

            What it really is is a channel (marketing, sales and distribution). It is about as easy to list a room on Aridnd as it is to list a product on Ebay or Etsy. And much easier than it is to get Amazon’s approval to list the same product on Amazon. Yuge numbers of companies (sole proprietors are corporate persons too) list their products and/or services on multiple channels. Done it myself. So common there are even companies that focus on the multi-channel listing market. Some of ’em hq right here in our sandy seaside town.

            Of course the private rooms located in SF that are listed on the Aridnd marketplace could also be listed for rent via other channels. Hopefully, for those who are, with a higher percentage lawful than on Aridnd.

          • Posted by Ohlone Californio

            Well that’s not what I said either. On AirBnB, short term private rooms rentals, is a market. Whether or not there is redundancy on other short term rental sites, or channels, as you call them doesn’t matter. VRBO for example is owners or property managers. AirBnB includes renters. And again, saying that short term private room rentals would otherwise be on the open rental market is nonsense.

          • Posted by Jake

            You’ve “said” or written a lot of vagueness about what is and isn’t a “market” in this thread. FTR, the “market” for room rentals in SF is bigger than Aridnd and long predates it. For example, Craigslist for SF has more than 2000 “rooms for rent & shares available” ads and more than 1000 “sublets & temporary” ads. FTR, there is no such thing as the “open rental market” except in your vague formulation. Properties can be listed for rent on one or many public channels, such as Craigslist and Aridnd, or they can be rented through private channels, or both.

            To even suggest that none of the private rooms listed on Aridnd have been removed from the longer term market is beyond foolish. But then there you are, and stubbornly so.

            This multi-channel “redundancy” as you call it and the resulting displacement/removal of inventory from the long term rental market are exactly the points that have been made at the start of and throughout this thread and are among the well-known effects of the Airdnd bizmodel this legislation aims to address. There’s no doubt that it happens. I’ve known people that did and do it. There have been lawsuits and HOA violation notices over it.

            And trying to bury your head in vague claims littered with pejoratives can’t disguise your willful ignorance on this. Throughout this thread you’ve offered zippo facts to support your vague but strongly voiced opinions, as has been your wont, IMHE.

          • Posted by Ohlone Californio

            You don’t get it. You don’t want to. You continually wish to say “remove.” No. Many of them were never there in the first place, -‘d were never going to be there. Why that is difficult to understand I don’t know.

          • Posted by Jake

            Of course I “get” that some of the thousands of private rooms in SF listed on Aridnd weren’t formerly for rent by other channels and wouldn’t be listed for rent if they were no longer allowed on Aridnd. I never said or wrote anything like what you are implying. It would be foolish or deeply naive to think that every single one of them was/would be or that every single one of them wasn’t/wouldn’t. In your first post, when you “jumped into” this thread, you claimed that none of these private rooms were “of the rental market”, as you so inadroitly phrased it. Not a single one, by your accounting. Go ahead and scroll up to see. Foolish or deeply naive, but there you are or were.

            The open questions are how many were for rent before they were listed on Airdnd, how many are also currently available for rent via non-Aridnd channels, and how many would be listed for rent if they were no longer allowed on Aridnd. I’m unaware of a study that reveals the answers, but I would hazard to estimate many more than the zero you had claimed and many less than the maximum of 3256, which no one on this thread has claimed.

            As for your claim to know my wishes wrt “say remove”, evidently your measure of “continually” is a single point. A curious geometeric you have there. Maybe that is why it is so difficult for you to understand the point or plain meaning of what I’ve written and what Hunter wrote.

  5. Posted by Martin

    I’m not sure if 60 days is the right threshold, but filling out city paperwork so someone can crash on your couch or spare bedroom for a few nights a year is an overkill.

  6. Posted by RJ

    Voters rejected basically this same rule proposed under Proposition F last year. Hopefully Ed Lee will veto

  7. Posted by MyOddCommentHandle

    i think just let everyone do however much they want but over 90 days needs to register with the City and AirBnB would turn over rental stats to the City for it’s own auditing purposes.

  8. Posted by Chedi 415

    I built out a lower-level space to host AirBNB travelers. Per the city, I can NOT make it another unit (RH2 zoned). I got the biz license, filled out the paperwork, etc. etc. As others have said, 90 days is a better compromise.

    • Posted by SFrentier

      Newsflash: you can probably legalize an additional unit. There are now several recent programs under DBI, legalizing inlaws, adding an accessory dwelling unit, etc. call DBI and ask!

      • Posted by Amewsed

        If you legalize in law unit, then the in law unit is subject to Rent Control. When the time comes if you want to convert it back to its original single family home (despite the allowance for RH2,) it will be nearly impossible since the City will see it as removing/demolishing a rent control unit.

        • Posted by SFrentier

          Yeah but it sounds like they want the extra rental income. Plus a legal 2nd unit adds lots of value to your property. Depends on your priorities.

  9. Posted by 2200

    I agree with hitman! We now have units used as vacation rentals, why would we ever allow for full time tenants to abuse our properties again? Until rent control laws CHANGE, our units will remain vacant. Change the rent control laws and the leniency the city gives tenants, then maybe i might offer units once again to tenants.

    • Posted by Hunter

      yeah “maybe” you “might” offer them, so likely most property owners wouldn’t bother renting to locals anyway since tourists are willing to shell out way more money and have no legal rights. Not gonna happen.

      • Posted by gentrified is a dirty word for clean

        It’s a lot more work to manage a vacation rental and the income is far less predictable. Many property owners would gladly take the steady money and low hassle of a stable tenant relationship at a fractional per-night rent. But they do NOT want to sign over all control of their nest egg to an increasingly belligerent communist city government while forgoing future increases in property value.

        A few years ago I was fortunate enough that 2 of 3 units in a building I owned became vacant at the same time. I paid the tenants of the 3rd unit 40K to scram and sold. The buyer left it empty for 2 years while waiting for condo conversion, then renovated and sold. I didn’t have the money to do that. Had Airbnb been around then, I might have been able to, but either way there was no way anyone was gonna rent those units out again on the city’s terms. Landlords are not morons, at least not all of them.

    • Posted by Hitman

      Tell your fellow landlords! This drop in rents is a result of the normal ebb & flow in new developments. From a landlords perspective, rent control is picking up pennies in front of a steamroller. It only works until it doesn’t.

  10. Posted by Easwuud

    No one wants to live next to a vacation rental. I am all for 60 days… or less.

    • Posted by SFRealist

      No one? I have no problem with it.

      • Posted by Easwuud

        Must have had nothing but quiet people next door. Every single time.

        Some choose to live in a residential area for a semblance of quiet and neighborhood feel partially derived by knowing all of one’s neighbors. If they want to live next to a hotel they move accordingly.

        That said I completely understand the concern regarding intrusion on an owner’s property rights, both in terms of rent control, tenants rights, and the curb on short term rentals.

        • Posted by SFRealist

          Some people can’t choose where they live. But I can choose to recognize that other people are different than me. In the grand scheme of things to get upset about, I have bigger problems than a few people with rolling suitcases. I can choose to not get in my neighbors’ business.

    • Posted by BTinSF

      I certainly don’t.

  11. Posted by modernedwardian

    the restriction on “hosted” rentals is particularly dumb.

    i imagine we will eventually see more stories of people who cannot make ends meet and now can no longer lodge people in an empty bedroom. or even people who cannot afford their mortgage.

    one of the airbnb homes here in noe was on the AIA architects tour a few years ago and sold for north of $2MM. i didn’t get the buyer paying that much for the home on 1/2 a lot or know what the story behind the listing… but i suspect they needed the money.

    • Posted by Hitman

      The restriction on inhosted rentals is particularly dumb. Shouldn’t the city want all those 2nd & 3rd homes occupied to some degree? If they want prices to come down they need to offer incentives. 2nd & 3rd homeowners did not get where they are because they lack understanding of $ and they are the ones who can withstand attacks on capital. These rules might hurt their income but will also make the capital gain so much sweeter. This is problem of letting renters run so much of the dialogue – its like letting prisoners run the prison and they will never hold the key… none of mine at least.

  12. Posted by sunil81

    Legally speaking, can someone explain to me how this legislation is possible? I don’t get how the Board of Supervisors can just override what voters decided on regarding Prop F? Wasn’t this debate settled then?

    • Posted by Jchencal

      The BoS can pass whatever rules they want, whether it’s legal though is another question. I am 99% sure this legislation, if it doesn’t get vetoed, will be struck down by the courts.

      • Posted by Mr Pants

        The courts are ‘tentatively’ holding up the legislation that has been passed but are not allowing the city to fine hosting companies until both sides can produce a reasonable procedure to migrate non registered hosts to becoming registered.

        • Posted by SocketSite

          That’s incorrect.

          As we noted yesterday, the injunction wasn’t related to the new restrictions reported above, which have yet to become law, but rather the ability of the City to fine hosting companies for renting units which haven’t been registered. It was issued to address the creation of a mechanism for hosting companies to effectively verify registrations. And it had nothing to do with providing time for hosts to register themselves.

    • Posted by Mr Pants

      Prop F didn’t pass so any of the legal text from it went in the trash.

  13. Posted by BTinSF

    I just want to know if this allows HOAs and fellow condo owners to sue their condo neighbors involved in BnB renting without registration (and often in violation of condo association rules).

    [Editor’s Note: See our second paragraph above.]

  14. Posted by Adam

    Everyone on this thread whining about how their rental properties aren’t being guaranteed maximum profit is delicious. Proposition 13 means never having to feel sorry for any of you.

    • Posted by SFrentier

      Adam, Adam, Adam…they are not equivalent. Example: I buy a triplex in the 1990’s for $500k and my prop taxes are about $500/month. But the tenants are each paying $1000/month each in rent. New guy buys identical building next door for $2mil. He’s paying about $2000/month in prop tax. BUT, his rents are $4000/month each unit. I’m saving $1500 in prop taxes, but getting screwed out of $9000 in rent. Soooo…I’d rather not have prop 13 and RC in this case. (Of course smart/savvy/lucky -your choice- landlords can have low prop 13 AND market rents, which is having your cake and eating it too. A rather sweet outcome, courtesy of SF politics.)

      • Posted by SocketSite

        If it was an identical building, his rents would be $1,000 per month as well. If not, you should have sold your building and bought the one next door.

        • Posted by Hitman

          Wow! It is now very obvious to me that you have a pro-rent control agenda here. By the above comment it is also obvious you are not in touch with the realty of the situation. At least I know why I get deleted. I still love this blog as far as development news! Best of luck to you.

          • Posted by SocketSite

            Your comments get deleted when they’re off topic or go down the path of referring to ‘smelly people in wheelchairs,’ threats and intimidation. We’re actually not pro-rent control but we do like accuracy when quoting numbers and economic impacts. And in terms of the reality of this situation, if you can muster anything beyond a “nuh-uh,” you’re welcome to chime in and take us to task.

        • Posted by SFrentier

          You’re misunderstanding. The buildings are identical, but whereas in the 1st building all the original tenants stayed put with their low 1990s rent. The bldg next door happened to have had recent turnover, hence getting market rents. Point being that even though he pays $1500/month more in property taxes then me, he still comes out way ahead financially. So prop 13 doesn’t help in cases like much at all to offset RC. That’s the point.

          • Posted by SocketSite

            We should know better than to engage in a counterfactual hypothetical, but in your example you’re ignoring the value you derived from Prop 13 which accumulated over the past 26 years.

            And in terms of the oversimplified relative returns and coming out ahead financially, your neighbor is generating a 6 percent return on his $2M investment, which is…the identical rate of return you’re generating on your $500K investment using the numbers you provided above.

          • Posted by SFrentier

            You are the one engaged in an asinine one sided argument. Who cares what the initial returns are. The point for almost all SF investors is that you gain appreciation, and hopefully increased income as well. So we both start out at 6%, but if I get market (or even partial) market rents, then my returns are significantly higher. That’s the whole point, duh! And the cumulative value of prop 13 is still a losing proposition (pun intended) in the example I used.

            Your arrogant and righteous mannerism reeks of someone who thinks they are smart and rational with numbers, but clearly point to someone who doesn’t own investment properties, and certainly not here. Hope you blog ad dollars are putting food on the table, but if you keep editing my comments, I’ll stop posting. And you know I bring readers to your site, because I know what the hell I’m talking about. G’day.

          • Posted by SocketSite

            That’s our mistake, we thought you were actually arguing financial returns and the impact of Proposition 13 and rent control, taking into account the capital invested and subsequent cash flows. We didn’t understand that the whole point of your hypothetical was to demonstrate that you would get more money if your rents were higher. But if that’s your big point, then well done, we certainly agree!

          • Posted by SFrentier

            No, the point was (to make it real simple): more rents is actually better in many cases than having prop 13. Some here think that prop 13 neutralizes RC. In many cases it does not. This has nothing to do with other investment factors such as initial capital outlay, appreciation, etc. Of course I know that the editor here is a super sophisticated financial analyst, so forgive my simpleton point, which I find necessary to make to educate your (slightly less enlightened) readers.

          • Posted by SocketSite

            But here’s the thing, the entire premise of your hypothetical is based on the consequences of having purchased 26 years ago, but you then proceed to ignore the benefits accrued over those 26 years and the price you paid, all of which are rather relevant when arguing relative returns compared to your neighbor’s investment today and how you’re getting screwed.

            On top of that, despite having the benefit of making up your numbers, you didn’t even mange to make your point about the relative value of proposition 13 versus rent control, other than saying they’re not.

          • Posted by SFrentier

            I’m at a loss why you are not getting a very simple point. I am ONLY comparing the value of prop 13 to not having RC. That’s it. And the reason is that some people here think that prop 13 mitigates the rent loss from having RC. My point is that in almost all cases a landlord is better off not having prop 13 and not having RC. Their properties will almost always generate more income that way, and hence be more valuable too.

          • Posted by SocketSite

            Perhaps we’re not getting your very simple point because you’ve failed to make it.

            Your hypothetical doesn’t prove, much less support, your argument about “the value of prop 13 to not having rent control” as you’re willfully ignoring the value of Prop 13 which occurs over time.

            And while your hypothetical cost/tax basis is locked in at a lower rate, your rent roll will eventually match, or even surpass, that of your hypothetical neighbor’s as your rents are marked to market with turnover.

            But tenants never leave, you say! Never! Well, except for all three in your hypothetical neighbor’s building next door (must have been an anomaly). And ignoring the actual, not hypothetical, data that suggests the average turnover for a rent controlled apartment in San Francisco is nine years.

          • Posted by SFrentier

            My point is, given a choice, most SF LL’s would forego prop 13 and be rid of RC, because that guarantees market rents. As it is now, it’s a crap shoot. And there are plenty of examples of LL’s who are loosing more in sub optimal rents than they gain in tax savings. In my example above, being > $1500 under in rents means the prop 13 savings don’t cover that. And I am looking at the cumulative values, as the tax savings is occurring in tandem with the rent roll, year after year.

  15. Posted by Johnny Simmons

    Further up, Adam makes an interesting case that SF’s style of rent control (which is very different from NYC’s for all who don’t know that) only works in tandem with CA’s overall tax code (Prop 13, passed basically at the same time as SF’s rent control measure, not coincidentally).

    I was impressed when the Chron, in their editorial reviews of every state and local proposition, concluded that we should vote against statewide income tax hikes for those earning in/above certain brackets to pay for things, *not* on the basis that they [the editorial review board] are opposed to tax hikes, or that the wealthier brackets shouldn’t be paying more, necessarily, but purely for philosophical reasons.

    It’s a cop out by legislators on doing their job, the board argues. Before sounding too vague, the legislators just asked a state filled with people who have identified time and time again their willingness or acceptance of higher taxes on the wealthiest earners in the state to approve another hike to pay for things. They didn’t actually do any work there.

    Work would involve potentially revisiting the code altogether and rewriting it to the way it was, or something similar to what nearly every other state has, where local taxing authorities/municipalities govern the way they impose taxes and collect them on their own citizens, and the state has little to no say.

    But you can’t have CA’s state income tax brackets AND have higher local property taxes via higher allowable ad valorem rates and annual or biannual reassessments subject to fewer caps. I’m sure someone can do the math and see what the point of inflection is if we lower state income tax brackets (and thus send less $$ to Sacramento, which that alone will be hard to convince legislators to swallow less money coming their way) and to which point we need to raise property taxes here specifically in SF, but don’t doubt that we *can* do this, it’s just too hard for most everyone to swallow and requires real work.

    And for all the provincial CAians who read/post comments, you can’t deny that FL and TX and TN and other states in the sunbelt have been able to accommodate much more rapid growth than we have, which has required those states to pony up for significant expansions of their infrastructure. I’ll agree that I think infrastructure in those states leaves a lot to be desired, but nowhere in this country is building rail or real infrastructure the way we used to (and yet FL is already zooming ahead on “high speed rail” way faster than we are in CA, and, and it’s largely or entirely privately financed at that!) I would posit our schools and our infrastructure is equivalent here in CA in the grand scheme of things. If you say it’s better, ask yourself by how much? And then compare that delta to the delta in cost of living/taxes.

    Those residents pay no state income tax, just the state gas taxes and excise taxes. They do pay significantly higher property taxes, but what they pay on their property goes to city hall and back out to them immediately, not to the state capital (Tallahassee) only to filter through a few giant bureaucracies and trickle partially back to the giant bureaucracies also found in local cities.

    We have an absurdly inefficient and outdated way of taxing ourselves in this state. But that’s a whole separate argument.

    As Adam pointed out, maybe we can abolish rent control AND get rid of CA Prop 13, and these supervisors, ugh, overreaching. Same in NYC. Lots of people AirBnBå’ing are doing so to be able to stay in the city and afford the rents and other costs. The irony.

    • Posted by Amewsed

      This is an interesting comparison of no income tax states. In SF, property owners get to pay all of the special assessments (DPW inspection fees, Rent Board fees, Various educational parcel taxes.) I believe it is worse in Alameda County (sewage, vector control fees, numerous school, libraries, etc. fees)

  16. Posted by Bart Samsung

    I am so glad the City is sticking it to the [people] who abuse AirBNB…

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